BEIJING (AP) – China’s trade contracted again in January and February as United States (US) and European demand weakened in the face of interest rate hikes, adding to pressure on official efforts to revive economic growth following the end of anti-virus controls.
Exports sank 6.8 per cent from a year earlier to USD506.3 billion, an improvement over December’s 10.1 per cent decline, customs data showed yesterday. Imports fell 10.2 per cent to USD389.4 billion, deepening December’s 7.3 per cent contraction.
China’s global trade surplus for the two months edged up 0.8 per cent over a year earlier to USD116.9 billion.
Forecasters expected trade to weaken as the likelihood of a recession in Western economies increased following rate hikes by the Federal Reserve and European Central Bank to cool economic activity and record-setting inflation.
“We don’t expect exports to rebound,” Iris Pang of ING said in a report. That adds to complications for President Xi Jinping’s government, which is trying to revive economic growth that sank last year to three per cent, the second-weakest rate since the 1970s.
Beijing on Sunday set this year’s growth target at “around five per cent” while the ruling Communist Party tries to encourage consumer demand to reduce reliance on exports and investment.
A revival in Chinese demand would be a boost to global suppliers at a time when US, European and Japanese sales are weakening. China is the biggest export customer for its Asian neighbours and a key consumer market.
Retail sales and other activity have started to improve after anti-virus restrictions that kept millions of people at home and temporarily shut down Shanghai and other industrial centres were lifted in December.
The economy also is under pressure from tighter controls on debt, which triggered a slump in China’s vast real estate industry and the economy in mid-2021.
The government has announced no plans to stimulate the economy with higher spending on building roads and other public works, which would boost demand for imported construction materials and equipment. “Imports may take some time to recover,” Pang said.
China reports January and February trade data together to screen out the effect of the Lunar New Year holiday, which begins at different times each year during those two months.
Factories shut down for up to two weeks.
